Cannabis incubators can improve equity and grow business, operators say

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Image of Sha Frye adding nutrients to cannabis plants

Sha Frye adds nutrients to cannabis plants during Cookies' 2022 incubator program. (Photo courtesy of Cookies)

A new batch of cannabis incubator and apprenticeship programs are offering resources and hands-on experience to small marijuana brands and trainees to improve equity and carve out roles for people impacted by the war on drugs.

In return, operators hope to reap the benefits of local community connections and low-cost labor while motivating employees with mission-driven work.

Partnerships, sharing resources and building community were key themes at MJBizCon 2023 in Las Vegas.

As capital has dried up in the cannabis industry, many operators feel pressure to do more with less.

“All of these brands need an environment where they can grow,” Jesse Channon, president of New York multistate operator The Cannabist Co., formerly known as Columbia Care, said in an interview with MJBizDaily.

Details are scant so far, but Channon said The Cannabist plans to create incubator-like programs for small marijuana brands inspired by models in the tech space.

“Why wouldn’t we just do more to drive additional throughput and sweat those assets more effectively,” he said.

“And you know who can help us do that? Great brands that consumers want to buy that will drive scale.”

Improving equity

New Jersey’s adult-use marijuana market was dominated by large MSOs when it first launched in April 2022.

And that felt like a slap in the face to Oscar Carrillo, who was incarcerated in the state for four years for selling drugs.

“It was like, wait a minute, now. I went to prison for this,” he said in an interview with MJBizDaily.

When Carrillo was granted a social equity license later that year, he felt vindicated. But soon, he had new barriers to overcome.

His company, Magic Garden Botanicals, will be vertically integrated and is self-funded through Carrillo’s successful telecommunications venture.

But securing real estate – a place to start sowing the seeds of his business – was another story.

Carrillo’s plans to take over waterfront property in Penns Grove, New Jersey, had just fallen through when he met Alan Trzuskoski, founder of Cannabiz Incubator.

Trzuskoski was looking for tenants from across the cannabis supply chain to rent space in his new facility in Bridgeton, New Jersey.

“He’s not charging a cannabis tax. It’s fair market value, which I’ve got to say is almost impossible to find,” Carrillo said.

For now, Trzuskoski said he’s basically a landlord who does some consulting work with clients to help them get licensed.

Eventually, he wants Cannabiz Incubator to evolve into an accelerator model, where companies with limited resources for infrastructure can get up and running – a model he first encountered in his previous work in tech in California’s Silicon Valley.

Knowing real estate would be a major hurdle for smaller businesses, Trzuskoski focused on that, securing property in Bridgeton, a designated impact zone, and pitched the municipality on his idea.

He was granted permission to host up to 15 businesses at the Cannabiz Incubator property.

So far, Trzuskoski has six tenants.

Eventually, he hopes to have enough infrastructure in place to build an ecosystem of smaller, under-resourced companies that can compete against large corporations.

“We can collectively compete against the big guys without necessarily having to be the big guys ourselves,” Trzuskoski said.

Local flavor and inexpensive labor

Former legacy market workers and aspiring entrepreneurs can have deep connections in their local communities and tailor their offerings accordingly.

Carrillo’s plan, for example, is to riff on New Jersey’s love of outlet stores by selling discounted cannabis products in unbranded packaging in a dispensary styled like an outlet store.

Meanwhile, Waterbury Center, Vermont-based Zenbarn Farms acquired a medical marijuana dispensary in Bennington, a medical/recreational outlet in Montpelier and a greenhouse cultivation and manufacturing facility from cannabis giant Curaleaf Holdings, which exited the state in December.

Zenbarn co-owners Noah Fishman and Marlena Tucker-Fishman told MJBizDaily that the MSO’s exit could have been tied to its lack of connection with the state, although the new owners managed to retain every former Curaleaf employee post-transaction.

As a dispensary and music venue, Zenbarn Farms was already focused on wellness and education.

To appeal more to local tastes as cultivators, the new owners plan to expand their regenerative farming practices by using living soil and wildflowers planted along the periphery of the greenhouse.

With the support of Richmond, Vermont-headquartered nonprofit Pennywise Foundation, the owners plan to grow their incubator program to offer hands-on experience across the supply chain.

“They’ll get a little bit of time with each aspect of the business from retail and cultivation,” said Tucker-Fishman, adding that marketing and bookkeeping also will be part of the program.

“Financial literacy is key.”

The co-owners of Zenbarn said they’ll be learning, too, which is another reason why tapping into workforce development will be mutually beneficial, they said.

“There’s a ton of need for labor in cannabis,” Fishman said.

“As much as you try to automate those things, nothing is better than a hand-trimmed bud, for example.

“So, if we can get people with barriers to employment, people with disabilities, people who are coming out of corrections who need some training and find ways to support them – say with state programs that are already supporting this stuff – we can get better cost of production.”

Mission-driven business

California cannabis brand Cookies hosts five students per cohort at its Cookies University in Humboldt County each summer.

Students must meet social equity requirements and are carefully vetted through interviews and questionnaires to ensure they’re a good fit for the close-knit environment.

Students live in tiny homes on campus as they learn about all aspects of the supply chain over two months from industry veterans such as Lindsey Renner, owner of Native Humboldt Farms.

Amanda Friedman, the head of social impact at Cookies, told MJBizDaily that rather than filling gaps for licensees, the program is designed to help those who don’t want to shoulder the risk of owning and operating a business and are more interested in employment in cultivation, manufacturing or retail.

Some students work for Cookies after graduation, while others find roles at different marijuana companies, and other graduates return to legacy markets or continue advocacy in unregulated states, she said.

Cookies doesn’t provide the program for business reasons, Friedman said.

“You could argue a business benefit is staying true to the brand of what Cookies is about,” she said.

“I think if we ever go away from that, we’re heading in the wrong direction.

But no, this is purely just something that the leadership and (founder and CEO) Berner have felt is important to do.

“So, we do it.”

Kate Robertson can be reached at kate.robertson@mjbizdaily.com.